I wonder why I did not buy Citibank stock when it went down to less than a dollar? Greed or fear? I was there in front of my E-Trade account did my fundamental and technical analysis, did all my home work, knew that the government will not let it die, my gut feeling was saying go for it!, I remember that afternoon… after 2 hours of thinking I stood up of my desk and said: Let’s wait.

You know the rest of the story. I regret that did not do it now. The opportunity is gone.
I have a few clients who asked me: Hey German when do you think the Real Estate market will bottom up? I usually tell them: “On Friday, September 4th, 2009 at 4.02 pm. There will be a huge thunderbult in the skies and the sun will come out shining! You will know exactly then that the recession is over and the prices will start rising after that exact moment”.

Point to make is there is no way to calculate the exact time to buy. You can analyze and then take advantage of a favorable environment. Do your homework, do some research and find out yourself if this is a good moment to do it:

– Interest rates are low. Yes 5% or 6% is not 4% but is less than 18%. Remember or read about Carter and Reagan times. I love the 80’s but I did not love this part.

– Inventories are still at all times high. Foreclosures makes the homes next door to decrease value and there are a lot of those so the prices are still cheap. Since developers are not building now and will not do it for the next 5 years (banks will not finance new projects), chances are that there will be a deficit in years to come when all the inventory dries up.

– Unemployment is at 10%. Not at 25% because that is a depression but with 10% people are “afraid” so there are less buyers out there. So if you are secure financially and confindent you will find less competition and find that great deal.

– Inmigration and a growing population rate is here to stay. In Chicago there is and will be lots of international inmigration and midwest inmigration. Just ask your neighbours in Michigan and Ohio where they kids will go to study or work. Florida will receive plenty of baby boomers and inmigrants from all over the world with the years to come. Location works also to decide what is the city that you will pick to live.

Yesterday we were looking at homes in Brickell with a few clients. The sweet deals, that corner units with that view to the bay at $180K are long gone… the whole tiers. The smart investors are almost done shopping. I am talking about the quiet ones, the ones with experience and money. They never make the news but own the prime properties in all the cities. The ones that buy “value” not fashion or price are buying now. Do you want to look for another “Sign of the Times”?

Have a great Labor Day weekend all!

German